When a Change in Depreciation Method Occurs

question 111

Multiple Choice

When a change in depreciation method occurs

• A) prior years' financial statements should be changed to reflect the newly adopted method.
• B) the change should be reported in current and future years.
• C) the cumulative effect of the change should be reflected on the income statement as of the beginning of the next year.
• D) the cumulative effect of the change in accounting principle should be classified as an discontinued operations on the income statement.

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Definitions:

Central Tendency

A statistical measure that identifies a single value as representative of an entire distribution of data, typically the mean, median, or mode.

Data Aging

The process by which data becomes outdated or less relevant over time, often due to changes in context or the emergence of more current information.

Pay Equity

The concept that employees should receive equal pay for work of equal value regardless of gender, ethnicity, or other non-performance-related factors.

Market Comparator Firms

Companies used as benchmarks to evaluate competitive aspects such as salaries, benefits, and working conditions for benchmarking purposes.